Microsoft's Windows Phone has overtaken Blackberry in the smartphone OS stakes for the first time. However, the smart device market still remains a two-horse race between Google's Android and Apple's iOS, with Google continuing to outpace its rival by a significant margin.

Windows Phone has taken the number three spot in the smartphone market with a 3.3 percent market share for the second quarter of 2013, compared to the 2.7 percent held by BlackBerry, which recently said it was considering options for the future of the business, including selling it off. In the second quarter of 2012, BlackBerry's market share stood at 5.2 percent while Windows Phone's was 2.6 percent.

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But despite this minor excitement, the smartphone market is really dominated Android, with Apple's iOS a considerably smaller second place.

Android continued to increase its lead with 79 per cent of the market in the second quarter (up from 64.2 percent in the second quarter of 2012), according to data from analyst Gartner, while iOS held a 14 percent share. However, with a new iPhone expected shortly, Apple could start to eat into Android's lead again.

Around 435 million mobile phones were sold to end users in the second quarter of 2013, an increase of 3.6 per cent from the same period last year, according to Gartner. Worldwide smartphone sales hit 225 million, up 46.5 per cent from the second quarter of 2012 while sales of feature phones totalled 210 million units — a 21 percent decline year-on-year.

Anshul Gupta, principal research analyst at Gartner, said smartphones accounted for 51.8 per cent of mobile phone sales in the second quarter of 2013, overtaking feature phone sales for the first time. Smartphone sales grew fastest in Asia-Pacific, Latin America and Eastern Europe with growth rates of 74.1 percent, 55.7 percent and 31.6 percent respectively.

According to Gartner, Samsung maintained its number one position in smartphones with 31.7 percent of the market, up from 29.7 percent in the second quarter of 2012. Apple's smartphone sales reached 32 million units in the second quarter of 2013, up 10.2 per cent from a year ago.

However, there could be challenges ahead as the smartphone market especially in the US and Western Europe is showing signs of reaching saturation point which is leading manufacturers to look at new form factors such as smartwatches.

Worldwide smartphone sales to end users by operating system in 2Q13 (thousands of units)

O/S

2Q '13 units

2Q'13 market share %

2Q '12 units

2Q '12 share %

Android

177,898.2

79.0

98,664.0

64.2

iOS

31,899.7

14.2

28,935.0

18.8

Microsoft

7,407.6

3.3

4,039.1

2.6

BlackBerry

6,180.0

2.7

7,991.2

5.2

Bada

838.2

0.4

4,208.8

2.7

Symbian

630.8

0.3

9,071.5

5.9

Others

471.7

0.2

863.3

0.6

Total

225,326.2

100.0

153,772.9

100.0

(Source: Gartner August 2013)

Gartner's research also included some analysis of the positions of the smartphone vendors:

Samsung: The South Korean company retained its number one position in the overall mobile phone market, and Gartner's Gupta said in a statement: "We see demand in the premium smartphone market come mainly from the lower end of this segment in the $400-and-below average selling price mark. It will be critical for Samsung to step up its game in the mid-tier and also be more aggressive in emerging markets. Innovation cannot be limited to the high end."

Nokia: Gartner said slowing demand of feature phone sales across many markets worldwide, and fierce competition in the smartphone segment, affected Nokia's mobile phone sales in the second quarter of 2013. Nokia's mobile phone sales totalled 61 million units, down from 83 million units a year ago, although its Lumia sales grew 112.7 per cent in the second quarter of 2013. Gupta said recently announced devices such as the Lumia 1020 should boost Lumia sales in the second half of 2013 but warned: "Nokia is facing tough competition from Android devices, especially from regional and Chinese manufacturers which are more aggressive in terms of price points."

Apple: Gartner said Apple faced a "significant drop" in the average selling price of its smartphones: despite the iPhone 5 being the most popular model, its average selling price has decline due to strong sales of the iPhone 4, which is sold at a strongly discounted price. Gupta said this showed the need for a new flagship model and the risk if Apple introduced a new lower-priced model. "Although the possible new lower-priced device may be priced similarly to the iPhone 4 at $300 to $400, the potential for cannibalisation will be much greater than what is seen today with the iPhone 4. Despite being seen as the less expensive sibling of the flagship product, it would represent a new device with the hype of the marketing associated with it."

Lenovo: Gartner said the challenge for Lenovo is to expand outside of China: it continues to rely heavily on its home market in China, which represents more than 95 percent of its sales. Its mobile phone sales grew 60.6 per cent to reach 11 million units in the second quarter of 2013, while smartphone sales grew 144 percent year-on-year and helped it rise to the number four spot in the worldwide smartphone market for the first time.